Pubdate: Sun, 19 Oct 2008
Source: Washington Post (DC)
Page: A22
Copyright: 2008 The Washington Post Company
Contact:  http://www.washingtonpost.com/
Details: http://www.mapinc.org/media/491
Author: Joshua Partlow, Washington Post Foreign Service
Bookmark: http://www.mapinc.org/people/Evo+Morales
Bookmark: http://www.mapinc.org/topic/Bolivia
Bookmark: http://www.mapinc.org/coke.htm (Cocaine)

U.S. TRADE MOVE SHAKES BOLIVIA

Suspension of Preferences Raises Fears of Widespread Job Losses

LA PAZ, Bolivia -- The decision by the Bush administration to suspend 
trade preferences that benefit Bolivia has left workers here worried 
about the potential for widespread layoffs at a time when the nation 
is struggling to cope with the international financial crisis.

U.S. officials estimated that between 20,000 and 30,000 Bolivians 
might lose their jobs as a result of the suspension of preferences, 
which are important for such Bolivian exports as textiles and jewelry.

"This decision is discriminatory and political," said Emilio Pinto 
Marin, vice minister of the budget department. "It's going to affect 
our productivity."

President Bush said Thursday that he signed the law suspending 
Bolivia's trade privileges because the country had "failed to 
cooperate with the United States on important efforts to fight drug 
trafficking." But many officials here see it as the latest step in an 
escalating feud between the two countries.

In recent months, cooperation between U.S. and Bolivian anti-drug 
authorities has deteriorated. In September, President Evo Morales 
expelled U.S. Ambassador Philip S. Goldberg over accusations that 
Goldberg was conspiring with Bolivia's political opposition. Goldberg 
denied the charges, and the United States responded by dismissing 
Bolivia's ambassador to Washington. Amid roadblocks and outbursts of 
political violence last month, the Peace Corps pulled its volunteers 
from Bolivia.

"You have to say that the traditional relationship that Bolivia had 
with the United States . . . has come to an end," Bolivia's minister 
of the presidency, Juan Ramon Quintana, said in an interview. "I 
believe this is the worst moment for the relations between the United 
States and the entire world. The worst moment."

This is the first time Bolivia has been excluded from the Andean 
Trade Preference Act, enacted in 1991, which affords some South 
American countries lower tariffs on certain exports to the United 
States. Bolivia's suspension can be reviewed and possibly reversed 
after June 2009, U.S. officials said.

Through September, Bolivia exported $385 million worth of products 
this year to the United States, its fourth-largest export market 
after Brazil, South Korea and Argentina. Bolivian officials estimated 
that about $70 million worth of Bolivian exports could be affected by 
the U.S. decision last week.

Quintana, the presidency minister, said that Bolivia is reorienting 
its textile exports to Brazil and Venezuela and that it would not be 
hurt economically by the loss of preferences.

"From the Bolivian perspective, this is an absurdity," he said. 
"Washington pretends they are going to confront the national 
government through this textiles sector. If Washington was aware of 
some basic facts, they would know this sector was always in 
opposition to the national government. What is this going to achieve?"

The decision to suspend trade preferences was driven by several 
developments that indicated Bolivia was not effectively combating the 
drug trade, said Christopher J. McMullen, a State Department deputy 
assistant secretary who specializes in South America.

At Bolivia's urging, the U.S. government this year removed workers 
from the U.S. Agency for International Development and the Drug 
Enforcement Administration from coca-producing regions of the 
country, and Bolivian officials have cooperated less with the 
narcotics affairs section of the U.S. Embassy in La Paz. The amount 
of coca grown in the country increased by about 5 percent in 2007 
over the previous year, according to U.N. statistics, although that 
was far below the 27 percent jump in Colombia.

"It was regrettable that we had to suspend Bolivia," McMullen said. 
"This is going to be a major blow, I think, for Bolivia in terms of 
losing these jobs."

McMullen added that the United States wants to remain engaged with 
Bolivia and is willing to reevaluate its position if it sees more 
cooperation, illegal coca eradication and drug interdiction.

"Hopefully, by next June they will be cooperating enough on combating 
drugs," he said.

Bolivian officials defend their coca policy, which allows farmers in 
certain areas to legally grow a third of an acre of the crop for 
traditional uses such as chewing the leaves and brewing teas. The 
days when farmers engaged in bloody struggles against U.S.-backed 
eradication teams are over, as coca has lost its stigma. Under 
Morales, cocaine seizures have risen each year; nearly 20 tons has 
been confiscated this year, according to government statistics.

But the drug war debate is not the primary concern for the small 
businesses making textiles in El Alto, the sprawling city on the 
plateau above the capital. Humberto Sandalio, president of the 
Regional Federation of Small Businesses of El Alto, said the 
companies are actively seeking new international markets to avoid 
widespread losses. One textile firm, Nueva Esperanza, said it would 
close down and lay off its 40 employees because of the loss of trade 
preferences, according to Bolivian news reports Saturday.

"The biggest problem in this situation is a political problem between 
governments," Sandalio said. "We can't manage this problem." 
- ---
MAP posted-by: Richard Lake